Biderman: "We Are In The First Quarter Of The Next Recession"

Rick Davis of The Consumer Metrics Institute plays Clark Kent to Charles Biderman's Superman as the two dig into just how manipulated and misreported the latest GDP data from the government was. Critically, they break down the components and using inflation levels (CPI-U or The BPP) that make some sense when considered with energy price movements during this quarter (as opposed to the deflator that was 'selected' by the BEA) Davis and Biderman are "really worried" that the real economy appears to be in a contractionary state if inflation is adjusted for correctly. Even the anemic 1.88% growth rate is 'very very poor' for an economy that is supposed to be 3 years into a recovery. The per-capita income (the money available to all households to spend) actually shrank - even using the BEA's inflation data. This juxtaposes shrinking household disposable income with a real economy supposedly growing (though slowly) which was driven almost exclusively by consumer spending - leaving Davis and Biderman questioning 'where this money is coming from?'. The simple answer is the savings rate has plunged, freeing up over $200bn in annual spending (and student loans have added another $100bn, refis $50bn, and strategic defaults $80bn) - all unsustainable one-time increases. This is what is really scary behind the GDP numbers. Spending is not coming from income. While much is made of the drop in spending driven by the fall in oil prices, Davis points out that the consumer is hitting a wall with his savings and concludes that the BEA is notoriously bad at calling turning points (only getting the Great Recession 'direction' correct after 16 months and magnitude after 40 months) - leaving him of the opinion that we may well be in the first quarter of the next recession.

Many thieves unfortunately find a powerful partner in their activities - the enabler, the Congress of the United States. It's one thing to have a do-nothing Congress; it's quite another to have lawmakers acting as pimps - using us in order to ride around in limousines.

For almost 24yrs the deficit spending and off-the-books manipulation of government have disguised the Deliberate Starvation of the so-called American Buisiness Engine. Remember Ross Perot's "sucking sound"? That was the ABE sucking air since nothing else remained to make things "run".

America has been "throttled", like strangled. It has been done Deliberately.

This is Depression. Has been since 2007. If you backed-out all the government spending, and government influenced & gov't responsible spending, the fact of Depression is plain.

30,000,000 Americans on food assistance since 2009 with numbers rising about a million a month. Not sign of a Depression to you?

In 2010, Big -0- removed 25% of the Dept of Agriculture "food stamp" funding to give that money to Several States that could not meet Teacher Payrolls. How is that for Depression?

Now the One Way Fucks still talk austerity?

The Soft-Sell is the only sale. Even on this site, you are being placated and fed pablum. Not intentionally, maybe... Demand for financial news is high (for some reason). As if you can believe any of this bullshit!

The American Depression of the 30s was a CAKE WALK compared to what is happening NOW In America. 50,000,000 on food stamps. Trillions in Looted Give-Aways to fascist corporations, but the people whose taxes were used against them to ruin business and drop home equity values and eliminate jobs are now forgotten?

Government Owed Citizens a DUE DILLIGENCE. Government chose to murder the economy and slaughter its citizenry economically, socially, and morally.

Depression? American Citizens are analogous to 30s & 40s European Jewry with the Betrayal, Fraud, and Intent To Abandon To Murder we face from our Government NOW!

Depression would be a Fucking Cakewalk this is an early stage genocide...

No, it's year 5 of the Great Recession.....this actually started back in 2007, when at the beginning of the year, Hank Paulson said, "This is one of the more stronger economies I have ever seen." Like George Constanza, think the opposite, and you'll get the real true answer.

It's not Great Depression 2.0, yet. People are still getting benefits, welfare, and as my buddy Phil Auerswald told me, the showers and shitters are still working.

The day you wake up, and turn on the faucet and flush the toliet and get no response? That's when you'll know we are in a Depression.

I miss that Peter Schiff, when he opted to talk more sense and numbers, rather than now with his hackney "Obama sucks....regulations...maw maw maw" jive that really is just a projection about the complaint of his higher end clinets.

Schiff's fundamentals are there, and he knows his stuff....he just is so willing to wave the GOP flag and not understand that what's good for him, isn't necessiarily good for the people.

I already questioned this ethos at Econ monitor. (good site btw.) how are their numbers better than the government's again? Anywho I can understand how if prices are falling 2% growth can have a "rock star quality" to it. And of course I can understand how their version of reality sounds good to them too. How many people say "their version of reality is bad for them" again?

I'm surprised no one has made a bigger deal of what Barron's reported 2 weeks ago via their weekly statistics tables catch. After some considerbale examination of drop in electric power use .... they dug in deeper and it was clear that for some 'mystreious' reason, electrical use is off 1.5% ... which is a lot. After every possible explanation ... the obvious question to anyone, which they tried to understate, was that a recession may already have started

they factored in max impact of new light bulbs & energy efficient appliances.

The power drop is last few months. Barron's reports a lot of econ activity statistics. The Statistics Editor and a reader caught the unexplained recent drop off.

This is not some bogus argument. As far as I'm concerned this is one of those instances where you have what everyone says they want ...actionable data. Yet this intriguing piece gets a big yawn. I guess my mind is weak compared to the hedge fund trading titans.

In fact I wouold have thought ZH would have picked up on this immediately as this some hard evidence to back up ECRI's view

recession is like secession, never accepted by the majority; those who are politically correct. "We are not in recession we are in deleveraging, its not the same thing." Really? All deleveraging means is that the socialisation of debt continues, the privatisation of profits as well. This guy Usmanov made a killing from Faceflop, where all other late comers, got sucked by the scam. That's globalisation sleight of hand and market deleveraging working hand in hand,"you lose suckers, we win as Oligarchs, we know how to read between the lines!"

If the market is in obsession with avoiding recession, if the obsession becomes paranoid and voids the checks and balances, to feed the money printing asteroid as it bursts not the fiat bubble but more honest labour toil to feed the unemployment cauldron worldwide, negating reality in absurd virtuality, we will all cry secession to Oligarchy possession of our real lives. A poet of the absurd becomes a patriot of the untold truth, a nemesis of the blatant lie.